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Investing in Your Marriage

Written by: MainStreet07/16/13 - 1:51 PM EDT

By Scott Westcott

NEW YORK (MainStreet) -- Early on in their marriage, Michael Hobbs and his wife took the individual approach to saving and investing. Yet not too long ago, they got some advice urging them to team up to aggressively improve their financial situation. Now they're investing partners - and liking the results.

"Once we finally took a joint approach to spending, saving and investing, we��� experienced substantial results that neither of us had accomplished on our own," says Hobbs, president of PahRoo Appraisal and Consultancy in Chicago. "It has truly been eye-opening and surprising.���Our experience is that alignment and the power of communal force yields significantly greater results than the solo route."

So does what works for the Hobbs make sense for you and your spouse or partner? Financial experts say there is no right answer to that question -- each couple is unique. Yet they emphasize that young couples that are newlyweds, planning to be married, or in a long-term committed relationship should establish some ground rules for investing sooner rather than later.

"More often than not, couples are focused on the short term and do not have investing styles, risk tolerance and retirement goals on their radar," says personal finance expert Felix Malitsky of MetLife Financial Group of New York. "One of the most important steps in managing finances as a couple means having an honest conversation about money early on, understanding how your partner thinks about money and investing, and continuing these open financial conversations down the road."

Among the actions, Malitsky and other experts recommend that couples take:

Assess current investments: Each of you probably has some investments or a retirement portfolio that dates back to your single life. Evaluate your individual holdings, and start considering the pros and cons of investing together. The amount, types, and performance of your individual investment portfolios going into a marriage will likely influence your approach moving forward. In addition, while most young couples would rather not think about splitting up, it's a possibility worth considering when it comes to finances. Jonathan Leidy, a wealth manager and retirement plan expert with Portico Wealth Advisors, notes that in most states in the event of divorce all property and assets obtained after you are married are subject to division. The only exception would be inherited assets. "So if an individual wants to preserve their sole and separate property rights to either pre-marital or inherited money, he or she must keep those assets in distinct accounts, without co-mingling them with marital funds," Leidy says.